Globalization was not killed by any one of the 6 culprits; it lost legitimacy when it stopped confirming the hierarchy that made it comfortable for the West.
Bruce is right that globalization is not really dead. Global trade is still large, with global trade still 58% of GDP vs 60% several years ago. What has collapsed is the old political consensus behind efficiency-first globalization.
The six “suspects” are interestingly: China, Davos Man, Trump, supply shocks, purposeful protectionists, and Silicon Valley. But I would frame them as symptoms of one deeper structural shift.
Globalization worked politically when it still confirmed Western advantage: finance, brands, IP, standards, capital markets, technology, and the upper layers of the global value chain remained largely under Western control.
Once globalization began producing a non-Western industrial system strong enough to challenge that hierarchy, the language changed. Efficiency became vulnerability. Openness became dependence. Competition became unfairness. Interdependence became leverage.
So globalization was not killed by one culprit. It lost moral legitimacy when it stopped producing outcomes that were politically and strategically comfortable for the West.
The new era is not deglobalization in a simple sense. It is globalization reorganized around resilience, control, security, and leverage.
Just curious, as I am not an economic analyst; I'm just a widely read retired, secondary social science teacher. Can you say more about the outcomes that were politically and strategically comfortable for the West that were not produced?
That is a very good question, and thank you for asking it so directly.
By “politically and strategically comfortable outcomes for the West,” I mean several things.
First, globalization was expected to keep the West at the top of the value chain. Manufacturing could move abroad, but finance, brands, intellectual property, standards, capital markets, advanced technology, and the most profitable layers of the system were expected to remain largely Western-controlled.
Second, China and other developing economies were expected to become large producers and consumers, but not full-system industrial competitors. The comfortable outcome would have been: cheaper goods for Western consumers, higher margins for Western multinationals, and developing countries remaining mostly inside assigned roles such as assembly, resource supply, or export manufacturing.
Third, economic integration was expected to make strategic rivals more predictable and more dependent on Western markets, technology, finance, and institutions. The assumption was that integration would discipline them.
But the actual outcome was different. China did not remain only a low-cost assembly platform. It built dense supply chains, infrastructure, engineering capacity, advanced manufacturing firms, and state-guided industrial capacity. In many sectors, it moved from being part of the Western-led value chain to challenging the hierarchy of that value chain.
That was politically uncomfortable because Western workers saw deindustrialization and wage pressure. It was strategically uncomfortable because Western governments realized that key industries, technologies, supply chains, and infrastructure systems were no longer securely under Western control.
So my point is not that globalization produced no benefits. It produced enormous benefits. The issue is that it eventually produced a distribution of industrial power that the West had not expected and could no longer easily control.
Globalization is ahead of its time and was manipulated by elites. Globalization cannot work if countries don’t play by the same rules, have vastly different ideologies and overestimate their worth and superiority. As long as one country wishes to dominate, globalization will fail.
I agree with you that globalization was manipulated by elites, and that it cannot work well when countries overestimate their own virtue or seek domination. But I would add that “same rules” alone are not enough.
Countries enter globalization with very different histories, institutions, industrial capacity, capital structures, labor systems, resource endowments, and security concerns. If the same rules lock some countries into finance and control, others into extraction, others into assembly, and others into dependency, then the rules may look neutral while the structure remains hierarchical.
That is why the deeper question is not only whether countries play by the same rules, but whether the system allows more countries to build real development capacity.
A healthier globalization would not be one where one power dominates under the language of universal rules. It would be one where trade, technology, infrastructure, finance, and industrial learning allow more societies to become capable, sovereign, and broadly prosperous.
Globalization did not fail because the world lacked one universal rulebook. It failed because the rulebook was written on top of unequal power, unequal capacity, and unequal starting points.
Meta spent three years as open-source AI's biggest champion, then went proprietary once the investment demanded returns (https://thesynthesisai.substack.com/p/the-open-secret). Openness as strategy rather than philosophy scales beyond companies to countries. China's $1.2 trillion surplus is roughly where "efficient partner" becomes "systemic threat" in Western political vocabulary.
What is wrong, in itself, with a country running a large trade surplus? Much of the fear over trade deficits stems from the myth that exports are good and imports are bad. But why should we think sending goods away is better than receiving them?
As Milton Friedman often pointed out, when China sells us goods, we give them dollars. If they simply burned those dollars, we would have received real goods in exchange for worthless paper.. Of course, they do not burn them. They either use those dollars to buy American goods and services or invest them in U.S. Treasury bonds, stocks, businesses, real estate, or other dollar-denominated assets.
In one form or another, the dollars return as demand for something American. A trade deficit is therefore matched by a capital inflow.
Globalization was not killed by any one of the 6 culprits; it lost legitimacy when it stopped confirming the hierarchy that made it comfortable for the West.
Bruce is right that globalization is not really dead. Global trade is still large, with global trade still 58% of GDP vs 60% several years ago. What has collapsed is the old political consensus behind efficiency-first globalization.
The six “suspects” are interestingly: China, Davos Man, Trump, supply shocks, purposeful protectionists, and Silicon Valley. But I would frame them as symptoms of one deeper structural shift.
Globalization worked politically when it still confirmed Western advantage: finance, brands, IP, standards, capital markets, technology, and the upper layers of the global value chain remained largely under Western control.
Once globalization began producing a non-Western industrial system strong enough to challenge that hierarchy, the language changed. Efficiency became vulnerability. Openness became dependence. Competition became unfairness. Interdependence became leverage.
Thai is what I put in my recent post Globalization is Moral when the West wins.(https://leonliao.substack.com/p/globalization-was-moral-when-the?r=731anr&utm_medium=ios)
So globalization was not killed by one culprit. It lost moral legitimacy when it stopped producing outcomes that were politically and strategically comfortable for the West.
The new era is not deglobalization in a simple sense. It is globalization reorganized around resilience, control, security, and leverage.
Just curious, as I am not an economic analyst; I'm just a widely read retired, secondary social science teacher. Can you say more about the outcomes that were politically and strategically comfortable for the West that were not produced?
That is a very good question, and thank you for asking it so directly.
By “politically and strategically comfortable outcomes for the West,” I mean several things.
First, globalization was expected to keep the West at the top of the value chain. Manufacturing could move abroad, but finance, brands, intellectual property, standards, capital markets, advanced technology, and the most profitable layers of the system were expected to remain largely Western-controlled.
Second, China and other developing economies were expected to become large producers and consumers, but not full-system industrial competitors. The comfortable outcome would have been: cheaper goods for Western consumers, higher margins for Western multinationals, and developing countries remaining mostly inside assigned roles such as assembly, resource supply, or export manufacturing.
Third, economic integration was expected to make strategic rivals more predictable and more dependent on Western markets, technology, finance, and institutions. The assumption was that integration would discipline them.
But the actual outcome was different. China did not remain only a low-cost assembly platform. It built dense supply chains, infrastructure, engineering capacity, advanced manufacturing firms, and state-guided industrial capacity. In many sectors, it moved from being part of the Western-led value chain to challenging the hierarchy of that value chain.
That was politically uncomfortable because Western workers saw deindustrialization and wage pressure. It was strategically uncomfortable because Western governments realized that key industries, technologies, supply chains, and infrastructure systems were no longer securely under Western control.
So my point is not that globalization produced no benefits. It produced enormous benefits. The issue is that it eventually produced a distribution of industrial power that the West had not expected and could no longer easily control.
Globalization is ahead of its time and was manipulated by elites. Globalization cannot work if countries don’t play by the same rules, have vastly different ideologies and overestimate their worth and superiority. As long as one country wishes to dominate, globalization will fail.
I agree with you that globalization was manipulated by elites, and that it cannot work well when countries overestimate their own virtue or seek domination. But I would add that “same rules” alone are not enough.
Countries enter globalization with very different histories, institutions, industrial capacity, capital structures, labor systems, resource endowments, and security concerns. If the same rules lock some countries into finance and control, others into extraction, others into assembly, and others into dependency, then the rules may look neutral while the structure remains hierarchical.
That is why the deeper question is not only whether countries play by the same rules, but whether the system allows more countries to build real development capacity.
A healthier globalization would not be one where one power dominates under the language of universal rules. It would be one where trade, technology, infrastructure, finance, and industrial learning allow more societies to become capable, sovereign, and broadly prosperous.
Globalization did not fail because the world lacked one universal rulebook. It failed because the rulebook was written on top of unequal power, unequal capacity, and unequal starting points.
Yes, agree.
Meta spent three years as open-source AI's biggest champion, then went proprietary once the investment demanded returns (https://thesynthesisai.substack.com/p/the-open-secret). Openness as strategy rather than philosophy scales beyond companies to countries. China's $1.2 trillion surplus is roughly where "efficient partner" becomes "systemic threat" in Western political vocabulary.
What is wrong, in itself, with a country running a large trade surplus? Much of the fear over trade deficits stems from the myth that exports are good and imports are bad. But why should we think sending goods away is better than receiving them?
As Milton Friedman often pointed out, when China sells us goods, we give them dollars. If they simply burned those dollars, we would have received real goods in exchange for worthless paper.. Of course, they do not burn them. They either use those dollars to buy American goods and services or invest them in U.S. Treasury bonds, stocks, businesses, real estate, or other dollar-denominated assets.
In one form or another, the dollars return as demand for something American. A trade deficit is therefore matched by a capital inflow.